The Truth About the “Booming Economy”
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If I have to see another talking head economist, another story in the Wall Street Journal someplace talking about this blistering economy, this booming economy that we have, the Fed’s dilemma, what are they going to do? I’m going to lose it. I really am. I am going to lose it. Today, Wall Street Journal heard on the street for a quick rundown of the challenges, Federal Reserve.
policymakers will be sorting through when they meet this week. The last week’s economic data filts the bill. Start with GDP. The Commerce Department on Thursday reported that the economy grew at a blistering 4.9 annual rate, making the fastest pace since the fourth quarter of 2021. Does anybody believe this? I mean, I mean, seriously.
anybody at all actually believe the numbers that the government is putting out. And then you get, you know, real great stories like this. Ah, this is just beautiful. Workers keep getting big raises. That’s an issue for the Fed. And again, this is kind of how they pull you in both directions. They’re trying to explain to you in this column.
that American workers are still commanding beefy pay raises. What do we have today? Wage growth, 1.1% on the quarter. That’s higher than the Fed wants it. So what you’re saying is that the Fed would prefer that people are making less money? That that’s better for, that you’re telling me it’s better for the economy if people make less money. Now, again, if you’re a thinking person,
Okay, if you don’t try to confuse the issue, it doesn’t make any sense. It doesn’t make sure you can pull some economists out here with a million different models and charts and explain, well, you know, that’s going to factor down into prices for goods and services, and it’s going to drive the price of things, and they’re going to give you all of this BS. So what you’re saying is, well, it’d be great if people make even less and less and less, and you know, we should be paying people, you know, I don’t know, a buck an hour.
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Is that then we’ll have a great economy? No, no, it’s the fact that they claim that they have some sort of control or understanding of something which is absolutely impossible to understand. What we can understand is what our eyes tell us. I’ve often talked about each and every one of us being our own do it yourself economists. Now, again,
podcast here we lament about all of the crime that’s taking place in the country and the fact that you know you can’t even put toilet paper out on the shelves in certain cities. I got pictures of it at this point in time with the amount of crime that’s taking place amount of theft that’s taking place we’ve talked about companies reporting now they called shrinkage rather than theft. You think we got a booming economy when
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and it’s actually becoming an issue on annual reports for corporations, the amount of stuff, the billions of dollars that is stolen every single, is that a sign of we have a booming economy or is that the sign of some sort of third world despotic place? Just saying, throwing it out there. You tell me what you think. Then we got this story.
516 publicly listed firms have filed for bankruptcy from January through September of 2023. Many of these firms most certainly propped up by ultra low rates and investment banks out there that were willing to float them some capital and then sell that loan off to somebody else, to some sucker somewhere else because they’re really good at that.
What is a zombie business? We’ve talked about them for a while. These are businesses that are unprofitable. They are unprofitable and they need to be propped up either by government money or by again, investment bank money, one or the other. It’s unsustainable and we’ve warned people about these, but now 516 of them gone out of business. Even the investment banks at this point in time can’t trick people into buying some of these
package garbage loans that they’re putting together. Then you’re getting this overall pessimistic tone on many conference calls that we’re having with corporations as they report earnings. And they’re looking at their profits moving forward and they’re just not seeing it at this point in time. And again, yeah, there’s a lot of concern that’s out there.
Oh, commercial real estate. Money has stopped flowing in commercial real estate. That’s right. Interest rates are too high. You can’t prop these things up anymore. Construction loans have dried up. I mean, I can go on and on and on here, people, and we do. It’s been my contention for a period of time now that we’re basically, we’re in and out of a recession.
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We’re in and out of a recession here in this country. It’s the reality of the terrain. You just take a look around you and you can see it with your own eyes. Again, does anybody feel like we’re in a blistering economy? Does it feel like the 1980s or the go-go 90s at any point in time? 4.9% blistering growth. No. No, it doesn’t feel like that at all.
And again, you can listen to these people, what they’re telling you, and they can continue to lie to you again, or you believe their nonsense, or you can believe your own eyes and see for yourself what’s really going on. With that being said, what does this mean? Recessions happen, people, they happen. And we’ve had a lot of, we talk about zombie companies, we’ve had a lot of gunk built up.
in our system and our overall economy due to ultra low interest rates for an extended period of time, due to the fact that we decided to shut the country down and fly a helicopter over it and pass out cash haphazardly. I mean, you name it, we’ve done it wrong. We’ve done it wrong. And quite frankly, to be honest with you, I’m surprised that the economy has held up and has been as resilient as it has considering all of these factors, all of these things that are going.
This point in time, this point in time, it all came down to what we originally were talking about almost two years ago now, when, you know, Jay Powell and the Federal Reserve was telling us inflation was transitory, everything is awesome, everything is going to be fine. I said, no, it’s not. I said inflation is here to stay. Inflation has been with us for a period of time, and we need to get our fiscal house in order. That is the underlying issue right now.
is just a complete and utter dysfunction in Washington DC. The fact that we’re $33 trillion in debt, that is an issue. What we’re gonna be spending, what we’re gonna be spending on interest payments going forward. There’s no place where this money can come from. Can I mention yesterday on the program, we take a look at tax revenues. If the economy was booming, tax revenues would be up.
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It was one of the things under the Clinton administration was it lowered, you know, lowered capital gains taxes and the tax revenue went up considerably. Again, I distinctly remember this. Again, it was what was a kind of shook me. It was the debate between Hillary Clinton and Barack Obama, democratic debate. And who was the?
moderator at the time, it’ll come to me in a minute. But the question was asked about taxes and capital gains taxes. And the question was posed, they said, well, under Bill Clinton, they lowered capital gains taxes and tax revenue to the government increased. And Hillary Clinton said she didn’t wanna raise capital gains taxes. And Barack Obama said he wanted to raise capital gains taxes.
due to fairness. And I was like, oh boy, here’s another economic ignoramus right here, doesn’t get it or understand it at all. But yeah, if we were booming, I mean, why are tax revenues so far down? All of these things, you know, we can take a look at from every different angle. And you know, it all points to the same thing. We’ve got an economy that’s in the doldrums. It’s been that way for a while.
Been that way for a while and I again I presented here the fact that we haven’t had a gangbusters economy here in this country. True economy. Something that’s not built on quicksand for crying out loud. Which is cheap money, whether it be, oh yeah, the economy was booming, roaring into the great recession. You know, why? Adjustable rate mortgages so people could go out and buy two, three, four pre-construction condos hoping to flip them. Is that something that’s actually solid? Is that something that’s actually sustainable?
Business investment in the United States is down. That’s the reality, it’s down.
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So yeah, look at it as we are in a recessionary period. Stop waiting for some economist or some pundit on TV or the high priests in Cambridge from the NBER to call it. We all know what it is. So they’re all saying if it looks like a duck and quacks like a duck, it’s probably a duck. Yeah, it’s probably a recession. Watchdog on wallstreet.com.
